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tomo222

Dynamics for low fee BTL mortgage

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Hi,

I am looking to use some spare cash to restructure my BTL mortgages, so I am actually borrowing very little. You may think this is strange tactic, it is, but that's another story (to do with reducing interest payments, giving me more savings than placing the spare cash in a savings account at historic low interest rates). This would only be a for a 1 year period when I would then look to remortgage again and take my money back out of these properties for other investment purposes.

My question is does anyone know how I could structure a new BTL mortgage so that the lender's fees are low/zero when I only intend to borrow <25K GBP? A quick comparison search reveals lender chargers of over 1K which defeats my purpose.

It may be that is just the case, but thought I'd ask the question!

Thanks

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You can work with a mortgage broker to test your requirements, a few points to remember when you do.

Mortgage Product v Mortgage Product

Not all mortgage products have "arrangement fees" at all, never-mind £1k. Though its not a freebie, its a trade-off with higher rates. Its not uncommon for the same lender to have two like-for-like products except in the way - one has fees and low rates, the other has no fees and higher rates. Which way to proceed depends on your circumstances. Personally I prefer to ignore fees & rates (where possible) and recommend the product with the least "total to pay" over the initial rate term. This compares both the products adding up fees, rates, etc... over say those 2 years and presenting one as the least expensive over that period.

Mortgage Consolidation

If you want to keep your total fees low. Obtaining 6 low-ltv mortgages at 2% each with a £1k fee can add up. Perhaps it is better to get 3 mortgages - compared these would be at higher LTV's higher rates but reduced fees. In this way you are viewing equity on your portfolio as a whole and not as individual properties. The wise property investor would too reduce the mortgages to NIL on the higher rates properties (non standard construction, hmo's, holiday-lets, etc..)

Also

You may find it difficult obtaining finance with just £25k borrowing. All lenders have a minimum loan amount and many are higher than £25k.

You can find contact details in my signature to Buy-to-Let Specialist Mortgage Brokers where they can go through the options with you.


:wub: Get Mortgage Advice from my Team at Bespoke Finance on 08009202001 or email hello@bespokefinance.info 
:ph34r: 
Please don't take my messages on Property Hub as Personal Financial Advice, just a rambling guy passing time on a Coffee Break.
 

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